Review of the Year Part I (Jan- April)

28 Dec 2005

A flurry of acquisition and a buoyant time for IT vendors suggest that this was the year that finally exorcised the ghosts of the technology slump. Sit back and take a rollercoaster ride through the year

Starting the year on a high, IDA Ireland reported that 2004 was the best since the halcyon days of 2000 in terms of inward investment and that Ireland was well down the road to becoming a knowledge economy, as long as it didn’t do a u-turn and end up back in the Banana Republic. What would be a buoyant year for communications companies in general began with the acquisition of Meteor‘s parent company by Alltel — and we now know what plans it had for it. Wireless broadband provider Irish Broadband secures €18m investment from National Toll Rolls and Kilsaran Concrete Products while Chorus is acquired by UGC. One of the longest-running battles in IT history came to an end when the board of PeopleSoft agreed to be acquired by Oracle. In a precursor to what would become one of the big Irish IT stories of the year, the Information Society Commission recommends a significant increase in IT spending for the healthcare sector. Mike Maloney, former Gateway boss, joins BT Ireland as the new chief operating officer. Apple’s iTunes service finally goes live in Ireland after brokering an agreement with the Irish Music Rights Organisation. Irish spam is on the up with almost 40pc of all email comprised of unsolicited junk and that’s not including management emails to staff. The longest ever prison sentence for hacking, nine years, was handed down in the US. And just to prove how geeky these guys can get, the target for his break in? A hardware store.

Hot on the heels of Google, Yahoo! arrives in Ireland creating 400 jobs and starts searching for a location. Eircom begins to roll out phase two of its national DSL service enabling some 200 rural communities with almost 200,000 lines. As ever the Revenue Commisoners led the way in e-government success stories revealing that 50pc of income tax was collected through its Revenue On-Line Service website in 2004 compared with 40pc in 2003. US telco acquires Dublin-based Lake Communications for €21.4m while three more home-grown tech companies, Am-Beo, Valista and Xsil made the prestigious Tornado top 100 company list of the European tech elite. Benefiting from better cost management the IE Domain Registry had a leap in the number of registrations to 43,000 in 2004 from 35,000 the year before. Spam, spam and more spam, as everyone’s favourite inbox item exceeded viruses as public enemy No 1 for businesses. Virus levels actually fell in Ireland in the preceding month. AIB sets up a dedicated technology financing unit aimed squarely at the budgets of its corporate customers. Fast-growing software specialist,, claims to have signed up more than four times as many subscribers as market leader Siebel. A slap on the wrist for Irish software graduates who are accused of lacking focus and experience by the managing director of TKO software at a games developer conference in The Digital Hub and a pat on the back for Kerry County Council that scooped the Innovator of the Year gong at the Eircom Innovation Though Technology Awards.

Broadband services in Ireland emerged as the 27th most expensive in the world, according to IrelandOffline, a lobby group that did its bit to keep the never-ending infrastructure debate in the news throughout the year. Bank of Ireland falls foul of the phishing and is forced to shut down its online personal banking service. The scams had risen by 42pc during January. Ireland stays static at 22nd place in the world league of a country’s propensity to exploit the opportunities offered by IT, according to the annual Global IT Report and the cost of doing business in Ireland had risen by 22pc since 2002, according to IBEC figures. More positive news for global IT firms came from a Eurocom Worldwide survey, which predicted that their revenues would rise in 2005 and Enterprise Ireland added more cheer declaring that there were 65 new start-ups in 2004, which offered the promise of 1,900 new jobs. New Sage products reinforce the company’s desire to avoid being typecast as an accounts software company with customer relationship management tools moving it deeper into the enterprise. The Department of Communications embarks on the next phase of its Group Broadband Scheme targeting some 150 regional groups. Some 100,000 Dublin homes can now avail of its broadband services according to NTL. Meanwhile, O2 revealed that two thirds of Irish SMEs do not use broadband. The Irish Management Institute highlights its technology management programme by launching a national campaign to promote training and IT and management leadership. Marking its 20th anniversary in Ireland with some style Microsoft created 100 new jobs with the establishment of its European Product Development Centre at its Sandyford HQ.

A dispute between the Government and the European Commission over grant aid to chip-maker Intel prompted the usual flurry of scare stories predicting another tech slump. The facts, however, showed a different story. According to IDA Ireland, job creation over last year and the early part of this was very healthy, proving that the country remains an attractive proposition for inward investment. One of the largest multinationals here, Dell, made clear its ties to Ireland despite hinting that a second European manufacturing site would probably be located in central or eastern Europe. Michael Dell reassured doubters by saying: “If we were setting up in Europe for the first time, Ireland would still probably get it.” Another positive sign was Oracle‘s decision to open a €1.6m software services facility in Belfast, having established a similar venture in Dublin the previous year. Meanwhile Kevin Cooney proved that Ireland can provide the brains as well as land to major multinationals, as he landed the plum role of chief information officer at the semiconductor firm Xilinx. BT Ireland (renamed this month from Esat BT) had reason to be cheerful in April, banking a three-year contract with AIB valued at €8m. ESB announced that it would open up its telecoms network to other carriers. Quarterly statistics from the Commission for Communications Regulation unearthed an interesting trend: almost a quarter of Irish homes now use mobile phones only. Smiles all round at An Post, which sold two companies. Having acquired PostTS in the UK and Spain for €8.5m in 2002, An Post found a buyer for the businesses in Alphyra, which forked out €85m for the privilege. In the intervening years An Post had invested €16m in developing the companies, thus turning a tidy profit on the deal. Nice work if you can get it.

By Ian Campbell and Gordon Smith

Pictured: Mike Maloney, BT Ireland’s chief operating officer